Business

Vimeo Creators Can Now Make Money Off Their Videos

Online video site Vimeo has announced Wednesday that it is going to allow creators to monetize their films and videos.

Rather than placing ads on videos — like what Google does with YouTube — Vimeo will allow Vimeo Plus and Vimeo Pro members to enable something it's calling Tip Jar.

Tip Jar is exactly what it sounds like. Once enabled, viewers will be able to show their appreciation for a video or clicking a "Tip this video" link. At that point, users can give from $0.99 - $500 to the video. Payments are handled using PayPal or a credit card and users don't even have to be logged into Vimeo to tip.

The feature launches today and Vimeo Plus and Vimeo Pro members will be able to enable the feature on their accounts and videos. Vimeo will give 85% of the gross to the content creator.

For now, the Tip Jar functionality will only work for videos played at Vimeo.com — but Vimeo told us that the company is working on a solution to add the tipping feature to embeds in the future.

Vimeo's president, Dae Mellencamp, likened Tip Jar to crowdfunding platforms such as Kickstarter or Indiegogo, but distinguished the feature as "crowdsourcing payments rather than funding."

We think this concept has a lot of potential. Consider the case of Caine's Arcade. The response to the video (which was hosted on Vimeo) was so strong, the filmmaker was able to start an entire scholarship fund to help creative kids go to college. At the time of this writing, the fund has raised nearly $250,000.

Now imagine if the creator had been able to put a Tip Jar link on the video when it first premiered. That would allow viewers to more seamlessly donate to a cause.

We can also see this as being a way for emerging artists and musicians to garner support from their fans to help them create more content.

Vimeo VOD

Tip Jar isn't the only monetization platform Vimeo has in the works. The company also announced its new Vimeo pay-to-view service, which will officially launch in early 2013.

Vimeo describes its pay-to-view feature as an "open platform for video creators to sell access to their films and videos." Think of it as the traditional VOD (Video On Demand) and rental model, but with more democratization.

In essence, creators will be able to put their content behind a paywall and they'll get to control their own pricing. That means that if a documentarian wants to release their film online the same time it appears at a film festival, they can offer access to users who pay $4.99 or whatever price they want.

Over the last few years, filmmakers have found lots of success with digital distribution channels such as Amazon, Netflix, iTunes, Vudu and cable VOD. We've also seen increased success with the day-and-date model — where films are released online either before or at the same times as they are in theaters.

YouTube started offering rentals several years ago and has day-and-date partnerships with studios such as Magnolia Pictures and Magnet Releasing. Just yesterday, Fox signed a deal with YouTube that will bring 600 films and TV shows to the platform on a rental basis.

What makes the Vimeo development unique is that it opens up this distribution option to a new class of content creators. I've spoken with lots of filmmakers about the process of getting content on these traditional digital services and it's a difficult process.

More than just indie creators, Vimeo is also hoping to target larger video producers. Given Vimeo's large audience (75 million unique views a month) and community of creators, this could also serve as a great platform for studios to target a specific audience.

Vimeo hasn't announced all the details on their pay-to-view program but the company will start beta testing the feature this fall with a curated film festival.

The pay-to-view option will only be available to Vimeo Pro users.

Doing it Vimeo's Way

Vimeo is a unique company in the video space because it eschews so many of the common conventions of video hosting. The focus has fundamentally always been on the user and on the content.

"We knew that when we wanted to start allowing users to monetize their videos that we still had to do it our way," Mellencamp told us. The focus has to always be on the user and the content. "For us, this isn't even necessarily a revenue driver," she said — noting that the potential to drive revenue does exist. Instead, it's about "helping our users create more great work."

To that end, I find the new Tip Jar and upcoming VOD options interesting and potentially disruptive.

The signal-to-noise ratio on Vimeo is remarkably high — especially compared to the YouTube's of the world — it makes sense that creators should be able to make money off of their work.

What do you think of Vimeo's new features? Let us know in the comments.

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